India's Largest Companies: IT Outsourcers Lead The Way

Infosys and its local rivals in India are some the largest IT outsourcers on the planet, and definitely the biggest in any emerging market. (Photographer: Jason Alden/Bloomberg)

If you include New Jersey-based Cognizant in the mix, cofounded by Lakshmi Narayanan from Tata Consultancy, then six of the biggest IT services companies in the world are run by Indians. As it stands, five of the largest IT consultancies call India home. That's more than China, more than Ireland and France, and only two less than the United States if you consider the companies whose outsourcing practice is at the core of their business, like IBM for instance.

India's biggest IT outsourcer of course is Tata Consultancy Services, ranked #404 on the Forbes Global 2000 list. Irish rival Accenture still has them beat at #286 and IBM is way up top at #67. Rounding out the list of India's biggest IT service providers in ranking order are Infosys, Wipro, HCL Technologies and Tech Mahindra. The latter two companies have climbed the charts this year while the big three have fallen behind.

"If you look at the India outsourcers and compare them to the rest of their competitors in the space, they clearly have struggled over the last few years," says Rajiv Jain, chairman and CIO of GQG Partners in Fort Lauderdale. "Out of all of them, I'm more optimistic about Infy. New management is talking about the right things."

Wipro and Infosys, better known by its ticker symbol — Infy — are household names in the U.S. tech world, for better or for worse. They are part of India's high tech hub in Bangalore.

The $156 billion Indian IT industry is often called the biggest job creator in the country while facing the brunt of the criticism surrounding the infamous H-1B visa program from official Washington and American-born software engineers alike. Infosys, Tata Consultancy, Cognizant and Wipro are part of the top 10 recipients of the visa, which allows foreign computer specialists to work temporarily in the U.S. for up to two years. Changes to the immigration laws here have many of these companies rethinking their models.

"The traditional outsourcing model is being challenged today," says Rex Chen, senior analyst for Sophus Capital in Des Moines. The overall spending growth is going down. Clients are getting more demanding on pricing and so India, just like every other IT outsourcer, has had to lower their prices. "Digital services is a new and big concept for these guys. You have things like AI, social, and the cloud growing very fast," Chen says, estimating compound annual growth of at least 20%. "You look at a company like Tata that is getting nearly a third from digital services and now India is seeing smaller, more nimble firms like Mindtree and L&T Infotech climb up the ranks because they can take on these smaller, new digital service projects as companies toy with these new tech solutions."

Despite these disruptions in the tech outsourcing world, the Indian firms are always top-of-mind along with Deloitte and Amazon, which has made inroads in their cloud services division.

According to report published by Intel in April, spending on artificial intelligence by Indian companies is expected to increase by around 11% over the coming 18 months. "India is gearing up to be a part of the AI revolution," report author Prakash Mallya wrote.

International Data Corporation is forecasting global spending on artificial intelligence to grow to $57.6 billion by 2021. And India's top firms have that growth in their wheelhouse. As AI takes over part of the processes at places like Infy and Wipro, more Indian workers are being laid off. The IT sector in India experienced more layoffs in comparison to employees in other industries, according to RiseSmart, a global outplacement services firm.

Corporate India is mainly known because of these big outsourcers. But the biggest companies in India are the traditional finance and commodity companies, led by Reliance Industries in the oil and gas sector. Reliance comes in at #83 and is the largest India company on the Global 2000. Oil and banks rule the top five and out of the 58 Indian companies on the Global 2000 list this year, some 24 of them are either government or private lenders.

The Global 2000 relies on data from FactSet Research Systems to screen for the biggest companies in four metric: sales, profits, assets and market value. Each of the 2000 lists has a minimum cutoff value in order for a company to qualify: sales $4.47 billion, profits of $333.3 million, assets of $10.72 billion and market value of $6.55 billion. A company needs to qualify for at least one of the lists in order to be eligible for the final Global 2000 ranking.

For more coverage of theForbesGlobal 2000 ranking of the world’s largest public companies, see below:

I've spent 20 years as a reporter for the best in the business, including as a Brazil-based staffer for WSJ. Since 2011, I focus on business and investing in the big emerging markets exclusively for Forbes.